If you are a young adult, and you do not know if you should rent or buy a home, then this is for you. Buying a home is a major life decision, and it is important not to make a rash choices because you are desperate not to live with your parents anymore. Consider the benefits of renting, and don’t get pressured into something that will not work for you.
The Ability to Handle Financial Trouble
We all go through it at some time–having to change the way you live to make ends meet. However, young people are more at risk of having to reduce their living expenses due to less job stability. It is much easier to make changes if you have a lease agreement versus a mortgage.
Stability
With renting, most finances are predictable. Maintenance issues are the responsibility of the landlord, so as a renter, you do not have to worry about putting a lot of extra money into your apartment.
Career Changes
Younger people can more easily change jobs and careers because they are not yet locked into a mortgage payment and familial responsibilities. If the opportunity comes up for the job of a lifetime in another state or country, it is much easier to sublet your apartment until your lease is up. On the other hand, selling a house can be a long process.
The Absence of Market Risk
Buying a house is a risk of money loss. The market is unpredictable, and the value of the house can go up or down drastically. The decrease of value can influence people’s ability to change course in their lives. It can be a big financial disappointment if one goes to sell their house only to find out that the selling price does not cover the money they owe for a loan, and they end up paying for a house that they no longer live in. The risk of the market doesn’t exist if you rent.
No Risk of Foreclosure
As a renter, you can be kicked out for not paying your rent, but this is much better than dealing with a foreclosure. A foreclosure is damaging for those that are involved since they lose the place that they call home. If you are at all concerned about being able to afford your monthly mortgage payments, then it is probably not the right time for you to buy.
No Property Taxes and Insurance
Property taxes and insurance can be expensive, but this is not your responsibility as a renter. If you are thinking about buying a home, it is important to factor in these additional costs. While you may be able to afford the monthly mortgage, you will also need to be able to pay for taxes and insurance.
If you do decide to rent, you should also obtain insurance. Fortunately, renters insurance is extremely low-cost, and can be little to no increase in your premium if you bundle it with other types of insurance. Renters insurance protects you and your belongings, which the landlord’s insurance does not cover. Contact the agents at TJ Woods Insurance, located at 20 Park Avenue in Worcester, MA to get started. Whether it’s homeowners or renters insurance, we can get you the right coverage at competitive rates.
